Dec 6, 2022 - Economy

The big split emerging in the economy

ISM Services Index
Data: Institute for Supply Management; Chart: Axios Visuals

There's a growing split between two major segments of the economy: manufacturing and services.

What's happening: Economic activity in the service sector grew in November, slightly above analysts' expectations, per the Institute for Supply Management's latest survey of activity at these businesses — which includes companies in retail, health care and transportation.

The big picture: Manufacturing is more sensitive to financial conditions, wrote Pantheon Macroeconomics in a note Monday. Plus, people are now spending less money on goods and more on experiences.

  • Folks are drawing down savings accumulated over the past two years. "That should keep service sector growth in the black for now," according to Pantheon.
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